Owens & Minor Goes for Millennials, Walkable City

Good economic news for the Richmond region: Medical supply giant Owens & Minor Inc. announced plans Thursday to open a client engagement center in downtown Richmond that will employ 500 people. Jobs will average about $53,700 in annual pay.

In making the announcement Governor Terry McAuliffe made much of the fact that Richmond competed against 60 other cities in a year-long search process. Less was made of the fact that Owens & Minor, which is located in the Mechanicsville suburb of Richmond, chose to locate in the central city rather than one of the region’s outlying counties.

The reason? “We want to attract the millennial generation,” CEO Cody Phipps told the Richmond Times-Dispatch. “We did our research. The millennial generation is going to be 50-plus percent of the workforce in the next few years, and they want to live in urban areas. They want to be downtown. They want to work in a state-of-the-art space. We like that we can draw from the universities around here.”

I don’t know who conducted Phipps’ research, but I know of one outfit in town that does specialize in generational marketing — The Institute for Tomorrow, which is affiliated with the Southeastern Institute of Research (SIR). (I worked for SIR about ten years ago.) Two days before Owens & Minor’s announcement, Managing Partner Matt Thornhill tweeted presciently, “Winning communities of tomorrow are 15-minute livable communities.”

By way of elaboration, he blogged about recent research conducted for the Virginia Secretary of Transportation. In a survey of 600 people around the U.S. who had just moved or were considering moving more than 100 miles, four out of five agreed with the statement, “Having access to stores, restaurants, and services close to my home (within about 15 minutes) is very important to me.” Almost as important was living withing a 15 minute commute of work.

It is often said that Millennials want to live “downtown” where it’s hip and cool and there are coffee shops and microbreweries. According to a recent Urban Land Institute study, though, only 37% of Millennial consider themselves to be a “city person,” wrote Thornhill; 36% classified themselves as “suburbanites” and 26% as “small town/country” people.

While there is nothing inevitable about Millennials wanting to live and work downtown, they are “hard-wired to be in community with each other,” Thornhill observed. “Thanks in part to doing school projects in teams from their middle school years onward, Millennials like to collaborate and trust in decisions made by the wisdom of the crowd. … They want neighborhoods where they can walk, bike, and use transit to get around.”

This community mindset, opined Thornhill, will drive the growth of “activity centers” of 15-minute livable communities. Activity centers don’t have to be in traditional cities (although most are). “Builders, developers, urban planners, and government officials are now catching up to the changing preferences of consumers and looking for ways to in-fill activity centers across their metropolitan landscape.”

Thornhill stops his analysis there. But as I think about the Owens & Minor decision, it’s not clear that urban planners and government officials actually have gotten the message. While most of the City of Richmond fits the definition of a 15-minute walkable community, there are only flyspecks of walkability in neighboring Henrico and Chesterfield counties. In Henrico County the one area that potentially has the critical mass to compete with downtown Richmond, the Innsbrook Office Park, was rezoned for urban mixed use back in 2010. But re-development has stalled for more than six years due to inflexible application of the zoning code.

Absent a dramatic change of thinking and practice in the suburban counties, it looks like the future of the Richmond metropolitan region belongs to the city. Everything old is new again: Richmond possesses the key elements of walkability — moderate density, mixed uses, grid streets and timeless architecture — inherited from a past era of urban grandeur. The counties are stuck with suburban sprawl. Expect to see more headlines like Owen & Minor’s in the region’s future.

13 responses to “Owens & Minor Goes for Millennials, Walkable City”

It’s easy to live in an urban part of a metro area when one does not have kids. But watch what happens when a family includes children and those children are close to starting school. Oh, some families have the bucks or the commitment to send their kids to non-public schools. Or they may be able to get their kids in a good public elementary school within the central city. But quite often you will find them moving to “yea gads” the suburbs or even to the exurbs to get their kids into good public schools. Anecdotally, I find a large portion of the younger members of the McLean Citizens Association that I meet have moved to the area for the schools.

Yes, indeed, being close to work is very desirable. I’m happier going to work now that my office is in Tysons and not downtown D.C. But all and all, it was more important to live in a part of Fairfax County with good schools – elementary – middle — high school.

I’d say the age delay in having children by many millennials has had a greater impact on where they live than the desirability for urban life.

That final sentence leaves me asking, is that because they have dug deeper roots, in these urban neighborhoods they started out in, by the time they start thinking about schools — and therefore are more inclined to dive into fixing the urban schools where they are than to relocate? Or is that recognition that whether they would want to leave the City earlier, young professionals can’t afford to move to a place as expensive as McLean until a little later in their careers?

We have the schools in NoVa but we have some pretty walkable areas too. Where are these urban escapees to McLean schools coming from, and why does it seem they are choosing northern Fairfax? I live in McLean too, but there are schools as good in Arlington and Falls Church and Alexandria has come a long way, and that’s without entering the exurbia of Prince William or Loudoun. Is it perhaps not the schools but the commute(s) to both DC and Tysons/ Herndon that’s attracting these Millennials to McLean?

” Millennials Are Moving Less Often Than Their Parents, and We’re Not Sure Why

The Me, Me, Me Generation is staying put.

Millennials, the largest generation in America, again confound expectations, this time thanks to a Pew Research Center report based on Census data that shows young adults move much less often than young adults of days past.

Rather than drifting from one quickly gentrifying neighborhood to another, millennials seem to be establishing a community where they happen to be.

Last year one in five people aged 25 to 35 said they lived somewhere else 12 months earlier. That’s six percentage points fewer than Gen Xers in 2000, and seven points fewer than late boomers in 1990. Millennials are also less likely to change their address than early boomers in 1981 and the silent generation in 1963.”

Good piece and thoughtful comments. Here are some additional thoughts.

Jim: you’re right that activity centers that provide walkability are few and far between in RVA. West Broad Village is a poor attempt. But we think Libbie Mill will be an ideal walkable community where one can live, work, access services, and the such all on foot or an easy bike ride. More of those types of mixed used communities are in our future.

To the comment on school age kids: we actually think the collaborative and community mindset of Millennials will drive them to “fix” their neighborhood school rather than relocate to the counties. Their “we” mentality is quite opposite of Boomer’s “me” mentality — rather than fix the schools, they uprooted and went where schools were better. Time will tell as not enough Millennials have kids of school age yet. But let’s look at this in ten years.

Larry: Good find on the Pew data. We saw it too and wondered how many 24-35 year olds are living rent free (or at least subsidized) in their parent’s homes today versus 20 years ago. Turns out in 2016 20% of male 25- to 34-year-olds lived with their parent(s). The comparable figure for females was 12.5%. Both of these figures were at their highest level since at least 1960. The historical trend can be found here: http://www.census.gov/hhes/families/files/graphics/AD-1.pdf.

Eyeballing the chart, it looks like back in 2000 it was about 12-14% of men and maybe 8-9% of women 25-34 still living with their parents. Is it too much of a leap to hypothesize that the difference between the 20% of Millennials who moved last year compared to 26% of Gen Xers in 2000 is mostly due to rent- and mortgage-free living?

Then there’s fewer of them married at that age. It take two incomes now to be able to buy a house, in most cases, so that’s likely a factor.

Owens & Minor used to be located near the Fan District, on Broad Street at Allen Ave, SE corner, in the same block as the post office. They sold the finest rubber hose to us delinquents for making slingshots and catapults! Then they opted for open space and cheap parking. Glad to hear they are returning.

one more to add besides Acbar’s excellent observation!
(info below is from Pew and Gallup)

” Gallup Analysis: Millennials, Marriage and Family”

59% of millennials are single and have never been married
60% of millennials do not have any children under 18 in their household

Millennials are wholly distinct and different than other generations and as some observe the differences, you can bet the marketing people are laser-focused because the young are the ones who buy and older much less so.

So the moral of this story is – if you are not a Millennial and you are seeing and hearing commercials you do not quite understand these days – join the club!

one more to add besides Acbar’s excellent observation!
(info below is from Pew and Gallup)

” Gallup Analysis: Millennials, Marriage and Family”

59% of millennials are single and have never been married
60% of millennials do not have any children under 18 in their household

Millennials are wholly distinct and different than other generations and as some observe the differences, you can bet the marketing people are laser-focused because the young are the ones who buy and older much less so.

So the moral of this story is – if you are not a Millennial and you are seeing and hearing commercials you do not quite understand these days – join the club!

I’m fascinated that Matt calls the Millennial the “we” generation vs the “me” with more inclination to stay and fix than to seek and relocate. I’d love to know more. Are there reflections of this difference, these trends, in party voting patterns? The Millennials I know are mostly urban/walkability fans and gentrification and make-government-do-its-job inclined, but when the government that’s in place is focused on poverty not traditional services, the Millenials’ desire to fix things can easily spill over into “throw the rascals out.”

” The other day Gov. Terry McAuliffe announced that the state was giving Owens & Minor $1.5 million to put a new customer-service center in Riverfront Plaza in downtown Richmond. Owens & Minor is a splendid company with a storied Richmond history. Its move downtown is a nice shot in the arm to the area. The company also worth about $2 billion. Virginia, meanwhile, is scrambling around under the sofa cushions, trying to close a budget gap.

The gift from taxpayers to Owens & Minor comes on top of $16 million Virginia and Arlington are giving to Nestlé to lure the company away from California. Maybe a few years from now California will offer Nestlé even more money to move back.”

I thought about bringing up the tax subsidies in my original post but decided against it in order to keep the focus on Millennials. That said, I agree with Larry here in questioning the subsidies.

Come on, Owens & Minor is headquartered in the Richmond region. I have to believe that there are strong business reasons for keeping this new, critical client engagement center in the same metropolitan area. The only consolation is that some of the subsidies were in the form of workforce training. I’m not sure what that training entails, but as a general principle, I get less heartburn from the state investing in education/training than I do when the state gives subsidies/tax breaks directly to the corporation.

I like the idea of workforce training as well as the idea of tax rebates in return for economic and/or employment performance.

but I also suspect this is an unintended but not unexpected effect of incentives which is the “where’ mine?” effect of any company who sees other companies getting “incentives” for locating.. not only coming here – but staying here!

And in general – I do not support Corporate taxation anyhow because it merely passes on that cost to customers – if it can – and if it cannot – it can end up putting that company at a competitive disadvantage to other companies or industries who don’t have that penalty.

These days – it’s all about jobs. The more jobs we have – the more taxes the State and localities can collect for services and infrastructure and the less entitlements taxpayers have to pay.

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